Speech Transcript:

To the Senate and House of Representatives:

A year of peace and general prosperity to this nation has passed
since the last assembling of Congress. We have, through a kind
Providence, been blessed with abundant crops, and have been spared
from complications and war with foreign nations. In our midst
comparative harmony has been restored. It is to be regretted,
however, that a free exercise of the elective franchise has by
violence and intimidation been denied to citizens in exceptional
cases in several of the States lately in rebellion, and the verdict
of the people has thereby been reversed. The States of Virginia,
Mississippi, and Texas have been restored to representation in our
national councils. Georgia, the only State now without
representation, may confidently be expected to take her place there
also at the beginning of the new year, and then, let us hope, will be
completed the work of reconstruction. With an acquiescence on the part
of the whole people in the national obligation to pay the public debt
created as the price of our Union, the pensions to our disabled
soldiers and sailors and their widows and orphans, and in the changes
to the Constitution which have been made necessary by a great
rebellion, there is no reason why we should not advance in material
prosperity and happiness as no other nation ever did after so
protracted and devastating a war.

Soon after the existing war broke out in Europe the protection of the
United States minister in Paris was invoked in favor of North Germans
domiciled in French territory. Instructions were issued to grant the
protection. This has been followed by an extension of American
protection to citizens of Saxony, Hesse and Saxe-Coburg, Gotha,
Colombia, Portugal, Uruguay, the Dominican Republic, Ecuador, Chile,
Paraguay, and Venezuela in Paris. The charge was an onerous one,
requiring constant and severe labor, as well as the exercise of
patience, prudence, and good judgment. It has been performed to the
entire satisfaction of this Government, and, as I am officially
informed, equally so to the satisfaction of the Government of North
Germany.

As soon as I learned that a republic had been proclaimed at Paris and
that the people of France had acquiesced in the change, the minister
of the United States was directed by telegraph to recognize it and to
tender my congratulations and those of the people of the United
States. The reestablishment in France of a system of government
disconnected with the dynastic traditions of Europe appeared to be a
proper subject for the felicitations of Americans. Should the present
struggle result in attaching the hearts of the French to our simpler
forms of representative government, it will be a subject of still
further satisfaction to our people. While we make no effort to impose
our institutions upon the inhabitants of other countries, and while we
adhere to our traditional neutrality in civil contests elsewhere, we
can not be indifferent to the spread of American political ideas in a
great and highly civilized country like France.

We were asked by the new Government to use our good offices, jointly
with those of European powers, in the interests of peace. Answer was
made that the established policy and the true interests of the United
States forbade them to interfere in European questions jointly with
European powers. I ascertained, informally and unofficially, that the
Government of North Germany was not then disposed to listen to such
representations from any power, and though earnestly wishing to see
the blessings of peace restored to the belligerents, with all of whom
the United States are on terms of friendship, I declined on the part
of this Government to take a step which could only result in injury
to our true interests without advancing the object for which our
intervention was invoked. Should the time come when the action of the
United States can hasten the return of peace by a single hour, that
action will be heartily taken. I deemed it prudent, in view of the
number of persons of German and French birth living in the United
States, to issue, soon after official notice of a state of war had
been received from both belligerents, a proclamation defining the
duties of the United States as a neutral and the obligations of
persons residing within their territory to observe their laws and the
laws of nations. This proclamation was followed by others, as
circumstances seemed to call for them. The people, thus acquainted in
advance of their duties and obligations, have assisted in preventing
violations of the neutrality of the United States.

It is not understood that the condition of the insurrection in Cuba
has materially changed since the close of the last session of
Congress. In an early stage of the contest the authorities of Spain
inaugurated a system of arbitrary arrests, of close confinement, and
of military trial and execution of persons suspected of complicity
with the insurgents, and of summary embargo of their properties, and
sequestration of their revenues by executive warrant. Such
proceedings, so far as they affected the persons or property of
citizens of the United States, were in violation of the provisions of
the treaty of 1795 between the United States and Spain.

Representations of injuries resulting to several persons claiming to
be citizens of the United States by reason of such violations were
made to the Spanish Government. From April, 1869, to June last the
Spanish minister at Washington had been clothed with a limited power
to aid in redressing such wrongs. That power was found to be
withdrawn, "in view," as it was said, "of the favorable situation in
which the island of Cuba" then "was," which, however, did not lead to
a revocation or suspension of the extraordinary and arbitrary
functions exercised by the executive power in Cuba, and we were
obliged to make our complaints at Madrid. In the negotiations thus
opened, and still pending there, the United States only claimed that
for the future the rights secured to their citizens by treaty should
be respected in Cuba, and that as to the past a joint tribunal should
be established in the United States with full jurisdiction over all
such claims. Before such an impartial tribunal each claimant would be
required to prove his case. On the other hand, Spain would be at
liberty to traverse every material fact, and thus complete equity
would be done. A case which at one time threatened seriously to
affect the relations between the United States and Spain has already
been disposed of in this way. The claim of the owners of the Colonel
Lloyd Aspinwall for the illegal seizure and detention of that vessel
was referred to arbitration by mutual consent, and has resulted in an
award to the United States, for the owners, of the sum of $19,702.50
in gold. Another and long-pending claim of like nature, that of the
whaleship Canada, has been disposed of by friendly arbitrament during
the present year. It was referred, by the joint consent of Brazil and
the United States, to the decision of Sir Edward Thornton, Her
Britannic Majesty's minister at Washington, who kindly undertook the
laborious task of examining the voluminous mass of correspondence and
testimony submitted by the two Governments, and awarded to the United
States the sum of $100,740.09 in gold, which has since been paid by
the Imperial Government. These recent examples show that the mode
which the United States have proposed to Spain for adjusting the
pending claims is just and feasible, and that it may be agreed to by
either nation without dishonor. It is to be hoped that this moderate
demand may be acceded to by Spain without further delay. Should the
pending negotiations, unfortunately and unexpectedly, be without
result, it will then become my duty to communicate that fact to
Congress and invite its action on the subject.

The long-deferred peace conference between Spain and the allied South
American Republics has been inaugurated in Washington under the
auspices of the United States. Pursuant to the recommendation
contained in the resolution of the House of Representatives of the
17th of December, 1866, the executive department of the Government
offered its friendly offices for the promotion of peace and harmony
between Spain and the allied Republics. Hesitations and obstacles
occurred to the acceptance of the offer. Ultimately, however, a
conference was arranged, and was opened in this city on the 29th of
October last, at which I authorized the Secretary of State to
preside. It was attended by the ministers of Spain, Peru, Chile, and
Ecuador. In consequence of the absence of a representative from
Bolivia, the conference was adjourned until the attendance of a
plenipotentiary from that Republic could be secured or other measures
could be adopted toward compassing its objects.

The allied and other Republics of Spanish origin on this continent
may see in this fact a new proof of our sincere interest in their
welfare, of our desire to see them blessed with good governments,
capable of maintaining order and of preserving their respective
territorial integrity, and of our sincere wish to extend our own
commercial and social relations with them. The time is not probably
far distant when, in the natural course of events, the European
political connection with this continent will cease. Our policy
should be shaped, in view of this probability, so as to ally the
commercial interests of the Spanish American States more closely to
our own, and thus give the United States all the preeminence and all
the advantage which Mr. Monroe, Mr. Adams, and Mr. Clay contemplated
when they proposed to join in the congress of Panama.

During the last session of Congress a treaty for the annexation of
the Republic of San Domingo to the United States failed to receive
the requisite two-thirds vote of the Senate. I was thoroughly
convinced then that the best interests of this country, commercially
and materially, demanded its ratification. Time has only confirmed me
in this view. I now firmly believe that the moment it is known that
the United States have entirely abandoned the project of accepting as
a part of its territory the island of San Domingo a free port will be
negotiated for by European nations in the Bay of Samana. A large
commercial city will spring up, to which we will be tributary without
receiving corresponding benefits, and then will be seen the folly of
our rejecting so great a prize. The Government of San Domingo has
voluntarily sought this annexation. It is a weak power, numbering
probably less than 120,000 souls, and yet possessing one of the
richest territories under the sun, capable of supporting a population
of 10,000,000 people in luxury. The people of San Domingo are not
capable of maintaining themselves in their present condition, and
must look for outside support. They yearn for the protection of our
free institutions and laws, our progress and civilization. Shall we
refuse them?

The acquisition of San Domingo is desirable because of its
geographical position. It commands the entrance to the Caribbean Sea
and the Isthmus transit of commerce. It possesses the richest soil,
best and most capacious harbors, most salubrious climate, and the
most valuable products of the forests, mine, and soil of any of the
West India Islands. Its possession by us will in a few years build up
a coastwise commerce of immense magnitude, which will go far toward
restoring to us our lost merchant marine. It will give to us those
articles which we consume so largely and do not produce, thus
equalizing our exports and imports. In case of foreign war it will
give us command of all the islands referred to, and thus prevent an
enemy from ever again possessing himself of rendezvous upon our very
coast. At present our coast trade between the States bordering on the
Atlantic and those bordering on the Gulf of Mexico is cut into by the
Bahamas and the Antilies. Twice we must, as it were, pass through
foreign countries to get by sea from Georgia to the west coast of
Florida.

San Domingo, with a stable government, under which her immense
resources can be developed, will give remunerative wages to tens of
thousands of laborers not now upon the island. This labor will take
advantage of every available means of transportation to abandon the
adjacent islands and seek the blessings of freedom and its
sequence--each inhabitant receiving the reward of his own labor.
Porto Rico and Cuba will have to abolish slavery, as a measure of
self-preservation, to retain their laborers.

San Domingo will become a large consumer of the products of Northern
farms and manufactories. The cheap rate at which her citizens can be
furnished with food, tools, and machinery will make it necessary that
contiguous islands should have the same advantages in order to compete
in the production of sugar, coffee, tobacco, tropical fruits, etc.
This will open to us a still wider market for our products. The
production of our own supply of these articles will cut off more than
one hundred millions of our annual imports, besides largely increasing
our exports. With such a picture it is easy to see how our large debt
abroad is ultimately to be extinguished. With a balance of trade
against us (including interest on bonds held by foreigners and money
spent by our citizens traveling in foreign lands) equal to the entire
yield of the precious metals in this country, it is not so easy to see
how this result is to be otherwise accomplished.

The acquisition of San Domingo is an adherence to the "Monroe
doctrine;" it is a measure of national protection; it is asserting
our just claim to a controlling influence over the great commercial
traffic soon to flow from west to east by way of the Isthmus of
Darien; it is to build up our merchant marine; it is to furnish new
markets for the products of our farms, shops, and manufactories; it
is to make slavery insupportable in Cuba and Porto Rico at once, and
ultimately so in Brazil; it is to settle the unhappy condition of
Cuba and end an exterminating conflict; it is to provide honest means
of paying our honest debts without overtaxing the people; it is to
furnish our citizens with the necessaries of everyday life at cheaper
rates than ever before; and it is, in fine, a rapid stride toward that
greatness which the intelligence, industry, and enterprise of the
citizens of the United States entitle this country to assume among
nations.

In view of the importance of this question, I earnestly urge upon
Congress early action expressive of its views as to the best means of
acquiring San Domingo. My suggestion is that by joint resolution of
the two Houses of Congress the Executive be authorized to appoint a
commission to negotiate a treaty with the authorities of San Domingo
for the acquisition of that island, and that an appropriation be made
to defray the expenses of such a commission. The question may then be
determined, either by the action of the Senate upon the treaty or the
joint action of the two Houses of Congress upon a resolution of
annexation, as in the case of the acquisition of Texas. So convinced
am I of the advantages to flow from the acquisition of San Domingo,
and of the great disadvantages--I might almost say calamities--to
flow from nonacquisition, that I believe the subject has only to be
investigated to be approved.

It is to be regretted that our representations in regard to the
injurious effects, especially upon the revenue of the United States,
of the policy of the Mexican Government in exempting from impost
duties a large tract of its territory on our borders have not only
been fruitless, but that it is even proposed in that country to
extend the limits within which the privilege adverted to has hitherto
been enjoyed. The expediency of taking into your serious consideration
proper measures for countervailing the policy referred to will, it is
presumed, engage your earnest attention.

It is the obvious interest, especially of neighboring nations, to
provide against impunity to those who may have committed high crimes
within their borders and who may have sought refuge abroad. For this
purpose extradition treaties have been concluded with several of the
Central American Republics, and others are in progress.

The sense of Congress is desired, as early as may be convenient, upon
the proceedings of the commission on claims against Venezuela, as
communicated in my messages of March 16, 1869, March 1, 1870, and
March 31, 1870. It has not been deemed advisable to distribute any of
the money which has been received from that Government until Congress
shall have acted on the subject.

The massacres of French and Russian residents at Tien-Tsin, under
circumstances of great barbarity, was supposed by some to have been
premeditated, and to indicate a purpose among the populace to
exterminate foreigners in the Chinese Empire. The evidence fails to
establish such a supposition, but shows a complicity between the
local authorities and the mob. The Government at Peking, however,
seems to have been disposed to fulfill its treaty obligations so far
as it was able to do so. Unfortunately, the news of the war between
the German States and France reached China soon after the massacre.
It would appear that the popular mind became possessed with the idea
that this contest, extending to Chinese waters, would neutralize the
Christian influence and power, and that the time was coming when the
superstitious masses might expel all foreigners and restore mandarin
influence. Anticipating trouble from this cause, I invited France and
North Germany to make an authorized suspension of hostilities in the
East (where they were temporarily suspended by act of the
commanders), and to act together for the future protection in China
of the lives and properties of Americans and Europeans.

Since the adjournment of Congress the ratifications of the treaty
with Great Britain for abolishing the mixed courts for the
suppression of the slave trade have been exchanged. It is believed
that the slave trade is now confined to the eastern coast of Africa,
whence the slaves are taken to Arabian markets.

The ratifications of the naturalization convention between Great
Britain and the United States have also been exchanged during the
recess, and thus a long-standing dispute between the two Governments
has been settled in accordance with the principles always contended
for by the United States.

In April last, while engaged in locating a military reservation near
Pembina, a corps of engineers discovered that the commonly received
boundary line between the United States and the British possessions
at that place is about 4,700 feet south of the true position of the
forty-ninth parallel, and that the line, when run on what is now
supposed to be the true position of that parallel, would leave the
fort of the Hudsons Bay Company at Pembina within the territory of
the United States. This information being communicated to the British
Government, I was requested to consent, and did consent, that the
British occupation of the fort of the Hudsons Bay Company should
continue for the present. I deem it important, however, that this
part of the boundary line should be definitely fixed by a joint
commission of the two Governments, and I submit herewith estimates of
the expense of such a commission on the part of the United States and
recommend that an appropriation be made for that purpose. The land
boundary has already been fixed and marked from the summit of the
Rocky Mountains to the Georgian Bay. It should now be in like manner
marked from the Lake of the Woods to the summit of the Rocky
Mountains.

I regret to say that no conclusion has been reached for the
adjustment of the claims against Great Britain growing out of the
course adopted by that Government during the rebellion. The cabinet
of London, so far as its views have been expressed, does not appear
to be willing to concede that Her Majesty's Government was guilty of
any negligence, or did or permitted any act during the war by which
the United States has just cause of complaint. Our firm and
unalterable convictions are directly the reverse. I therefore
recommend to Congress to authorize the appointment of a commission to
take proof of the amount and the ownership of these several claims, on
notice to the representative of Her Majesty at Washington, and that
authority be given for the settlement of these claims by the United
States, so that the Government shall have the ownership of the
private claims, as well as the responsible control of all the demands
against Great Britain. It can not be necessary to add that whenever
Her Majesty's Government shall entertain a desire for a full and
friendly adjustment of these claims the United States will enter upon
their consideration with an earnest desire for a conclusion consistent
with the honor and dignity of both nations.

The course pursued by the Canadian authorities toward the fishermen
of the United States during the past season has not been marked by a
friendly feeling. By the first article of the convention of 1818
between Great Britain and the United States it was agreed that the
inhabitants of the United States should have forever, in common with
British subjects, the right of taking fish in certain waters therein
defined. In the waters not included in the limits named in the
convention (within 3 miles of parts of the British coast) it has been
the custom for many years to give to intruding fishermen of the United
States a reasonable warning of their violation of the technical rights
of Great Britain. The Imperial Government is understood to have
delegated the whole or a share of its jurisdiction or control of
these inshore fishing grounds to the colonial authority known as the
Dominion of Canada, and this semi-independent but irresponsible agent
has exercised its delegated powers in an unfriendly way. Vessels have
been seized without notice or warning, in violation of the custom
previously prevailing, and have been taken into the colonial ports,
their voyages broken up, and the vessels condemned. There is reason
to believe that this unfriendly and vexatious treatment was designed
to bear harshly upon the hardy fishermen of the United States, with a
view to political effect upon this Government. The statutes of the
Dominion of Canada assume a still broader and more untenable
jurisdiction over the vessels of the United States. They authorize
officers or persons to bring vessels hovering within 3 marine miles
of any of the coasts, bays, creeks, or harbors of Canada into port,
to search the cargo, to examine the master on oath touching the cargo
and voyage, and to inflict upon him a heavy pecuniary penalty if true
answers are not given; and if such a vessel is found "preparing to
fish" within 3 marine miles of any of such coasts, bays, creeks, or
harbors without a license, or after the expiration of the period
named in the last license granted to it, they provide that the
vessel, with her tackle, etc., shall be forfeited. It is not known
that any condemnations have been made under this statute. Should the
authorities of Canada attempt to enforce it, it will become my duty
to take such steps as may be necessary to protect the rights of the
citizens of the United States.

It has been claimed by Her Majesty's officers that the fishing
vessels of the United States have no right to enter the open ports of
the British possessions in North America, except for the purposes of
shelter and repairing damages, of purchasing wood and obtaining
water; that they have no right to enter at the British custom-houses
or to trade there except in the purchase of wood and water, and that
they must depart within twenty-four hours after notice to leave. It
is not known that any seizure of a fishing vessel carrying the flag
of the United States has been made under this claim. So far as the
claim is founded on an alleged construction of he convention of 1818,
it can not be acquiesced in by the United States. It is hoped that it
will not be insisted on by Her Majesty's Government.

During the conferences which preceded the negotiation of the
convention of 1818 the British commissioners proposed to expressly
exclude the fishermen of the United States from "the privilege of
carrying on trade with any of His Britannic Majesty's subjects
residing within the limits assigned for their use;" and also that it
should not be "lawful for the vessels of the United States engaged in
said fishery to have on board any goods, wares, or merchandise
whatever, except such as may be necessary for the prosecution of
their voyages to and from the said fishing grounds: and any vessel of
the United States which shall contravene this regulation may be
seized, condemned, and confiscated, with her cargo."

This proposition, which is identical with the construction now put
upon the language of the convention, was emphatically rejected by the
American commissioners, and thereupon was abandoned by the British
plenipotentiaries, and Article I, as it stands in the convention, was
substituted.

If, however, it be said that this claim is founded on provincial or
colonial statutes, and not upon the convention, this Government can
not but regard them as unfriendly, and in contravention of the
spirit, if not of the letter, of the treaty, for the faithful
execution of which the Imperial Government is alone responsible.

Anticipating that an attempt may possibly be made by the Canadian
authorities in the coming season to repeat their unneighborly acts
toward our fishermen, I recommend you to confer upon the Executive
the power to suspend by proclamation the operation of the laws
authorizing the transit of goods, wares, and merchandise in bond
across the territory of the United States to Canada, and, further,
should such an extreme measure become necessary, to suspend the
operation of any laws whereby the vessels of the Dominion of Canada
are permitted to enter the waters of the United States.

A like unfriendly disposition has been manifested on the part of
Canada in the maintenance of a claim of right to exclude the citizens
of the United States from the navigation of the St. Lawrence. This
river constitutes a natural outlet to the ocean for eight States,
with an aggregate population of about 17,600,000 inhabitants, and
with an aggregate tonnage of 661,367 tons upon the waters which
discharge into it. The foreign commerce of our ports on these waters
is open to British competition, and the major part of it is done in
British bottoms.

If the American seamen be excluded from this natural avenue to the
ocean, the monopoly of the direct commerce of the lake ports with the
Atlantic would be in foreign hands, their vessels on transatlantic
voyages having an access to our lake ports which would be denied to
American vessels on similar voyages. To state such a proposition is
to refute its justice.

During the Administration of Mr. John Quincy Adams Mr. Clay
unanswerably demonstrated the natural right of the citizens of the
United States to the navigation of this river, claiming that the act
of the congress of Vienna in opening the Rhine and other rivers to
all nations showed the judgment of European jurists and statesmen
that the inhabitants of a country through which a navigable river
passes have a natural right to enjoy the navigation of that river to
and into the sea, even though passing through the territories of
another power. This right does not exclude the coequal right of the
sovereign possessing the territory through which the river debouches
into the sea to make such regulations relative to the police of the
navigation as may be reasonably necessary; but those regulations
should be framed in a liberal spirit of comity, and should not impose
needless burdens upon the commerce which has the right of transit. It
has been found in practice more advantageous to arrange these
regulations by mutual agreement. The United States are ready to make
any reasonable arrangement as to the police of the St. Lawrence which
may be suggested by Great Britain.

If the claim made by Mr. Clay was just when the population of States
bordering on the shores of the Lakes was only 3,400,000, it now
derives greater force and equity from the increased population,
wealth, production, and tonnage of the States on the Canadian
frontier. Since Mr. Clay advanced his argument in behalf of our right
the principle for which he contended has been frequently, and by
various nations, recognized by law or by treaty, and has been
extended to several other great rivers. By the treaty concluded at
Mayence in 1831 the Rhine was declared free from the point where it
is first navigable into the sea. By the convention between Spain and
Portugal concluded in 1835 the navigation of the Douro throughout its
whole extent was made free for the subjects of both Crowns. In 1853
the Argentine Confederation by treaty threw open the free navigation
of the Parana and the Uruguay to the merchant vessels of all nations.
In 1856 the Crimean War was closed by a treaty which provided for the
free navigation of the Danube. In 1858 Bolivia by treaty declared
that it regarded the rivers Amazon and La Plata, in accordance with
fixed principles of national law, as highways or channels opened by
nature for the commerce of all nations. In 1859 the Paraguay was made
free by treaty, and in December, 1866, the Emperor of Brazil by
imperial decree declared the Amazon to be open to the frontier of
Brazil to the merchant ships of all nations. The greatest living
British authority on this subject, while asserting the abstract right
of the British claim, says: It seems difficult to deny that Great
Britain may ground her refusal upon strict law, but it is equally
difficult to deny, first, that in so doing she exercises harshly an
extreme and hard law; secondly, that her conduct with respect to the
navigation of the St. Lawrence is in glaring and discreditable
inconsistency with her conduct with respect to the navigation of the
Mississippi. On the ground that she possessed a small domain in which
the Mississippi took its rise, she insisted on the right to navigate
the entire volume of its waters. On the ground that she possesses
both banks of the St. Lawrence, where it disembogues itself into the
sea, she denies to the United States the right of navigation, though
about one-half of the waters of Lakes Ontario. Erie, Huron, and
Superior, and the whole of Lake Michigan, through which the river
flows, are the property of the United States. The whole nation is
interested in securing cheap transportation from the agricultural
States of the West to the Atlantic Seaboard. To the citizens of those
States it secures a greater return for their labor; to the inhabitants
of the seaboard it affords cheaper food; to the nation, an increase in
the annual surplus of wealth. It is hoped that the Government of Great
Britain will see the justice of abandoning the narrow and inconsistent
claim to which her Canadian Provinces have urged her adherence.

Our depressed commerce is a subject to which I called your special
attention at the last session, and suggested that we will in the
future have to look more to the countries south of us, and to China
and Japan, for its revival. Our representatives to all these
Governments have exerted their influence to encourage trade between
the United States and the countries to which they are accredited. But
the fact exists that the carrying is done almost entirely in foreign
bottoms, and while this state of affairs exists we can not control
our due share of the commerce of the world; that between the Pacific
States and China and Japan is about all the carrying trade now
conducted in American vessels. I would recommend a liberal policy
toward that line of American steamers--one that will insure its
success, and even increased usefulness.

The cost of building iron vessels, the only ones that can compete
with foreign ships in the carrying trade, is so much greater in the
United States than in foreign countries that without some assistance
from the Government they can not be successfully built here. There
will be several propositions laid before Congress in the course of
the present session looking to a remedy for this evil. Even if it
should be at some cost to the National Treasury, I hope such
encouragement will be given as will secure American shipping on the
high seas and American shipbuilding at home.

The condition of the archives at the Department of State calls for
the early action of Congress. The building now rented by that
Department is a frail structure, at an inconvenient distance from the
Executive Mansion and from the other Departments, is ill adapted to
the purpose for which it is used, has not capacity to accommodate the
archives, and is not fireproof. Its remote situation, its slender
construction, and the absence of a supply of water in the
neighborhood leave but little hope of safety for either the building
or its contents in case of the accident of a fire. Its destruction
would involve the loss of the rolls containing the original acts and
resolutions of Congress, of the historic records of the Revolution
and of the Confederation, of the whole series of diplomatic and
consular archives since the adoption of the Constitution, and of the
many other valuable records and papers left with that Department when
it was the principal depository of the governmental archives. I
recommend an appropriation for the construction of a building for the
Department of State.

I recommend to your consideration the propriety of transferring to
the Department of the Interior, to which they seem more appropriately
to belong, all powers and duties in relation to the Territories with
which the Department of State is now charged by law or usage; and
from the Interior Department to the War Department the Pension
Bureau, so far as it regulates the payment of soldiers' pensions. I
would further recommend that the payment of naval pensions be
transferred to one of the bureaus of the Navy Department.

The estimates for the expenses of the Government for the next fiscal
year are $18,244,346.01 less than for the current one, but exceed the
appropriations for the present year for the same items $8,972,127.56.
In this estimate, however, is included $22,338,278.37 for public
works heretofore begun under Congressional provision, and of which
only so much is asked as Congress may choose to give. The
appropriation for the same works for the present fiscal year was
$11,984,518.08.

The average value of gold, as compared with national currency, for
the whole of the year 1869 was about 134, and for eleven months of
1870 the same relative value has been about 115. The approach to a
specie basis is very gratifying, but the fact can not be denied that
the instability of the value of our currency is prejudicial to our
prosperity, and tends to keep up prices, to the detriment of trade.
The evils of a depreciated and fluctuating currency are so great that
now, when the premium on gold has fallen so much, it would seem that
the time has arrived when by wise and prudent legislation Congress
should look to a policy which would place our currency at par with
gold at no distant day.

The tax collected from the people has been reduced more than
$80,000,000 per annum. By steadiness in our present course there is
no reason why in a few short years the national tax gatherer may not
disappear from the door of the citizen almost entirely. With the
revenue stamp dispensed by postmasters in every community, a tax upon
liquors of all sorts and tobacco in all its forms, and by a wise
adjustment of the tariff, which will put a duty only upon those
articles which we could dispense with, known as luxuries, and on
those which we use more of than we produce, revenue enough may be
raised after a few years of peace and consequent reduction of
indebtedness to fulfill all our obligations. A further reduction of
expenses, in addition to a reduction of interest account, may be
relied on to make this practicable. Revenue reform, if it means this,
has my hearty support. If it implies a collection of all the revenue
for the support of the Government, for the payment of principal and
interest of the public debt, pensions, etc., by directly taxing the
people, then I am against revenue reform, and confidently believe the
people are with me. If it means failure to provide the necessary means
to defray all the expenses of Government, and thereby repudiation of
the public debt and pensions, then I am still more opposed to such
kind of revenue reform. Revenue reform has not been defined by any of
its advocates to my knowledge, but seems to be accepted as something
which is to supply every man's wants without any cost or effort on
his part.

A true revenue reform can not be made in a day, but must be the work
of national legislation and of time. As soon as the revenue can be
dispensed with, all duty should be removed from coffee, tea and other
articles of universal use not produced by ourselves. The necessities
of the country compel us to collect revenue from our imports. An army
of assessors and collectors is not a pleasant sight to the citizen,
but that of a tariff for revenue is necessary. Such a tariff, so far
as it acts as an encouragement to home production, affords employment
to labor at living wages, in contrast to the pauper labor of the Old
World, and also in the development of home resources.

Under the act of Congress of the 15th day of July, 1870, the Army has
gradually been reduced, so that on the 1st day of January, 1871, the
number of commissioned officers and men will not exceed the number
contemplated by that law.

The War Department building is an old structure, not fireproof, and
entirely inadequate in dimensions to our present wants. Many
thousands of dollars are now paid annually for rent of private
buildings to accommodate the various bureaus of the Department. I
recommend an appropriation for a new War Department building, suited
to the present and growing wants of the nation.

The report of the Secretary of War shows a very satisfactory
reduction in the expenses of the Army for the last fiscal year. For
details you are referred to his accompanying report.

The expenses of the Navy for the whole of the last year--i.e., from
December 1, 1869, the date of the last report--are less than
$19,000,000, or about $1,000,000 less than they were the previous
year. The expenses since the commencement of this fiscal year--i.e.,
since July 1--show for the five months a decrease of over $2,400,000
from those of the corresponding months last year. The estimates for
the current year were $28,205,671.37. Those for next year are
$20,683,317, with $955,100 additional for necessary permanent
improvements. These estimates are made closely for the mere
maintenance of the naval establishment as now is, without much in the
nature of permanent improvement. The appropriations made for the last
and current years were evidently intended by Congress, and are
sufficient only, to keep the Navy on its present footing by the
repairing and refitting of our old ships.

This policy must, of course, gradually but surely destroy the Navy,
and it is in itself far from economical, as each year that it is
pursued the necessity for mere repairs in ships and navy-yards
becomes more imperative and more costly, and our current expenses are
annually increased for the mere repair of ships, many of which must
soon become unsafe and useless. I hope during the present session of
Congress to be able to submit to it a plan by which naval vessels can
be built and repairs made with great saving upon the present cost.

It can hardly be wise statesmanship in a Government which represents
a country with over 5,000 miles of coast line on both oceans,
exclusive of Alaska, and containing 40,000,000 progressive people,
with relations of every nature with almost every foreign country, to
rest with such inadequate means of enforcing any foreign policy,
either of protection or redress. Separated by the ocean from the
nations of the Eastern Continent, our Navy is our only means of
direct protection to our citizens abroad or for the enforcement of
any foreign policy.

The accompanying report of the Postmaster-General shows a most
satisfactory working of that Department. With the adoption of the
recommendations contained therein, particularly those relating to a
reform in the franking privilege and the adoption of the
"correspondence cards," a self-sustaining postal system may speedily
be looked for, and at no distant day a further reduction of the rate
of postage be attained.

I recommend authorization by Congress to the Postmaster-General and
Attorney-General to issue all commissions to officials appointed
through their respective Departments. At present these commissions,
where appointments are Presidential, are issued by the State
Department. The law in all the Departments of Government, except
those of the Post-Office and of Justice, authorizes each to issue its
own commissions.

Always favoring practical reforms, I respectfully call your attention
to one abuse of long standing which I would like to see remedied by
this Congress. It is a reform in the civil service of the country. I
would have it go beyond the mere fixing of the tenure of office of
clerks and employees who do not require "the advice and consent of
the Senate" to make their appointments complete. I would have it
govern, not the tenure, but the manner of making all appointments.
There is no duty which so much embarrasses the Executive and heads of
Departments as that of appointments, nor is there any such arduous and
thankless labor imposed on Senators and Representatives as that of
finding places for constituents. The present system does not secure
the best men, and often not even fit men, for public place. The
elevation and purification of the civil service of the Government
will be hailed with approval by the whole people of the United
States.

Reform in the management of Indian affairs has received the special
attention of the Administration from its inauguration to the present
day. The experiment of making it a missionary work was tried with a
few agencies given to the denomination of Friends, and has been found
to work most advantageously. All agencies and superintendencies not so
disposed of were given to officers of the Army. The act of Congress
reducing the Army renders army officers ineligible for civil
positions. Indian agencies being civil offices, I determined to give
all the agencies to such religious denominations as had heretofore
established missionaries among the Indians, and perhaps to some other
denominations who would undertake the work on the same terms--i.e., as
a missionary work. The societies selected are allowed to name their
own agents, subject to the approval of the Executive, and are
expected to watch over them and aid them as missionaries, to
Christianize and civilize the Indian, and to train him in the arts of
peace. The Government watches over the official acts of these agents,
and requires of them as strict an accountability as if they were
appointed in any other manner. I entertain the confident hope that
the policy now pursued will in a few years bring all the Indians upon
reservations, where they will live in houses, and have schoolhouses
and churches, and will be pursuing peaceful and self-sustaining
avocations, and where they may be visited by the law-abiding white
man with the same impunity that he now visits the civilized white
settlements. I call your special attention to the report of the
Commissioner of Indian Affairs for full information on this subject.

During the last fiscal year 8,095,413 acres of public land were
disposed of. Of this quantity 3,698,910.05 acres were taken under the
homestead law and 2,159,515.81 acres sold for cash. The remainder was
located with military warrants, college or Indian scrip, or applied
in satisfaction of grants to railroads or for other public uses. The
entries under the homestead law during the last year covered 961,545
acres more than those during the preceding year. Surveys have been
vigorously prosecuted to the full extent of the means applicable to
the purpose. The quantity of land in market will amply supply the
present demand. The claim of the settler under the homestead or the
preemption laws is not, however, limited to lands subject to sale at
private entry. Any unappropriated surveyed public land may, to a
limited amount, be acquired under the former laws if the party
entitled to enter under them will comply with the requirements they
prescribe in regard to the residence and cultivation. The actual
settler's preference right of purchase is even broader, and extends
to lands which were unsurveyed at the time of his settlement. His
right was formerly confined within much narrower limits, and at one
period of our history was conferred only by special statutes. They
were enacted from time to time to legalize what was then regarded as
an unauthorized intrusion upon the national domain. The opinion that
the public lands should be regarded chiefly as a source of revenue is
no longer maintained. The rapid settlement and successful cultivation
of them are now justly considered of more importance to our
well-being than is the fund which the sale of them would produce. The
remarkable growth and prosperity of our new States and Territories
attest the wisdom of the legislation which invites the tiller of the
soil to secure a permanent home on terms within the reach of all. The
pioneer who incurs the dangers and privations of a frontier life, and
thus aids in laying the foundation of new commonwealths, renders a
signal service to his country, and is entitled to its special favor
and protection. These laws secure that object and largely promote the
general welfare. They should therefore be cherished as a permanent
feature of our land system.

Good faith requires us to give full effect to existing grants. The
time-honored and beneficent policy of setting apart certain sections
of public land for educational purposes in the new States should be
continued. When ample provision shall have been made for these
objects, I submit as a question worthy of serious consideration
whether the residue of our national domain should not be wholly
disposed of under the provisions the homestead and preemption laws.

In addition to the swamp and overflowed lands granted to the States
in which they are situated, the lands taken under the
agricultural-college acts and for internal-improvement purposes under
the act of September, 1841, and the acts supplemental thereto, there
had been conveyed up to the close of the last fiscal year, by patent
or other equivalent title, to States and corporations 27,836,257.63
acres for railways, canals, and wagon roads. It is estimated that an
additional quantity of 174,735,523 acres is still due under grants
for like uses. The policy of thus aiding the States in building works
of internal improvement was inaugurated more than forty years since in
the grants to Indiana and Illinois, to aid those States in opening
canals to connect the waters of the Wabash with those of Lake Erie
and the waters of the Illinois with those of Lake Michigan. It was
followed, with some modifications, in the grant to Illinois of
alternate sections of public land within certain limits of the
Illinois Central Railway. Fourteen States and sundry corporations
have received similar subsidies in connection with railways completed
or in process of construction. As the reserved sections are rated at
the double minimum, the sale of them at the enhanced price has thus
in many instances indemnified the Treasury for the granted lands. The
construction of some of these thoroughfares has undoubtedly given a
vigorous impulse to the development of our resources and the
settlement of the more distant portions of the country. It may,
however, be well insisted that much of our legislation in this regard
has been characterized by indiscriminate and profuse liberality. The
United States should not loan their credit in aid of any enterprise
undertaken by States or corporations, nor grant lands in any
instance, unless the projected work is of acknowledged national
importance. I am strongly inclined to the opinion that it is
inexpedient and unnecessary to bestow subsidies of either
description; but should Congress determine otherwise I earnestly
recommend that the right of settlers and of the public be more
effectually secured and protected by appropriate legislation.

During the year ending September 30, 1870, there were filed in the
Patent Office 19,411 applications for patents, 3,374 caveats, and 160
applications for the extension of patents. Thirteen thousand six
hundred and twenty-two patents, including reissues and designs, were
issued, 1,010 extended, and 1,089 allowed, but not issued by reason
of the nonpayment of the final fees. The receipts of the office
during the year were $136,304.29 in excess of its expenditures.

The work of the Census Bureau has been energetically prosecuted. The
preliminary report, containing much information of special value and
interest, will be ready for delivery during the present session. The
remaining volumes will be completed with all the dispatch consistent
with perfect accuracy in arranging and classifying the returns. We
shall thus at no distant day be furnished with an authentic record of
our condition and resources. It will, I doubt not, attest the growing
prosperity of the country, although during the decade which has just
closed it was so severely tried by the great war waged to maintain
its integrity and to secure and perpetuate our free institutions.

During the last fiscal year the sum paid to pensioners, including the
cost of disbursement, was $27,780,811.11, and 1,758 bounty-land
warrants were issued. At its close 198,686 names were on the pension
rolls.

The labors of the Pension Office have been directed to the severe
scrutiny of the evidence submitted in favor of new claims and to the
discovery of fictitious claims which have been heretofore allowed.
The appropriation for the employment of special agents for the
investigation of frauds has been judiciously used, and the results
obtained have been of unquestionable benefit to the service.

The subjects of education and agriculture are of great interest to
the success of our republican institutions, happiness, and grandeur
as a nation. In the interest of one a bureau has been established in
the Interior Department--the Bureau of Education; and in the interest
of the other, a separate Department, that of Agriculture. I believe
great general good is to flow from the operations of both these
Bureaus if properly fostered. I can not commend to your careful
consideration too highly the reports of the Commissioners of
Education and of Agriculture, nor urge too strongly such liberal
legislation as to secure their efficiency.

In conclusion I would sum up the policy of the Administration to be a
thorough enforcement of every law; a faithful collection of every tax
provided for; economy in the disbursement of the same; a prompt
payment of every debt of the nation; a reduction of taxes as rapidly
as the requirements of the country will admit; reductions of taxation
and tariff, to be so arranged as to afford the greatest relief to the
greatest number; honest and fair dealings with all other peoples, to
the end that war, with all its blighting consequences, may be
avoided, but without surrendering any right or obligation due to us;
a reform in the treatment of Indians and in the whole civil service
of the country; and, finally, in securing a pure, untrammeled ballot,
where every man entitled to cast a vote may do so, just once at each
election, without fear of molestation or proscription on account of
his political faith, nativity, of color.

Ulysses S. Grant